Banking probe to quiz RBS chief

Stephen Hester is among the witnesses due to appear before MSPs

The Royal Bank of Scotland's chief executive is to be grilled by a Scottish Parliament committee, as part of an inquiry on the financial crisis.

Stephen Hester will be questioned by MSPs alongside other high-ranking industry figures, including Lloyds executive director Archie Kane.

Holyrood's cross-party economy committee wants to uncover more about the effects of the banking crisis.

MSPs will also assess plans for economic recovery.

The inquiry, which begins on 16 September, wants to find out how problems in the banking and financial sectors have affected the Scottish economy, and assess whether current plans to boost the economy are up to scratch.

'Recover again'

Although control over these areas lies with Westminster, the convener of Holyrood's economy committee, Iain Smith, said the inquiry would provide a vital insight on how to go forward in the future.

"This recession is widely recognised as one of the worst on record and most commentators think unemployment levels will still be an issue for some time to come," said the Liberal Democrat MSP.

"We want to examine what the future holds for Scotland's financial sector.

"We want to be able to assess how we turn around the problems in our financial institutions, build on our successes and help the wider economy to recover again."

The UK Government has stepped in to help see several Scottish-based financial institutions through the credit crunch - 70% of RBS is now owned by the taxpayer, while the Treasury agreed to take on about £1.6bn of debt under the deal which saw the Nationwide take over the collapsed Dunfermline Building Society.

Ministers also allowed the takeover of HBOS by Lloyds TSB to bypass normal competition rules.

The committee inquiry, which will spend the next few months taking evidence, will also hear from Owen Kelly, the boss of industry group Scottish Financial Enterprise and BBC business editor Robert Peston.

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